Columbia Business Law Review
Managers, Inc.'s workers own the majority of the company's shares. They do not vote for the board of directors; instead, a trust votes the workers' shares. Managers, Inc.'s own directors appoint the committee that votes the trust's shares. Shockingly, those directors find themselves entrenched, winning repeated reelection under this system. The workers own the firm, but they have little or no say in the management of the firm.
Brett McDonnell, ESOP's Failures: Fiduciary Duties When Managers of Employee-Owned Companies Vote to Entrench Themselves, 2000 Colum. Bus. L. Rev. 199 (2000), available at http://scholarship.law.umn.edu/faculty_articles/162.